House Ways and Means Committee votes to release Trump's tax returnsget the free app
Portions from six years of former President Donald Trump's tax returns will be made public by the Democratic-controlled House Ways and Means Committee, which voted 24-16 on Tuesday to release the years of tax records Trump has long tried to shield.
The vote was along party lines. House Ways and Means Committee chair Richard Neal, a Democrat of Massachusetts, on Tuesday night called for legislation that would require annual audits of a president's taxes. Speaker Nancy Pelosi urged the House to take the legislation up quickly — which it would have to, since Republicans are set to take control of the chamber next month.
On Tuesday night, the committee released two reports, one from its members and another from the Joint Committee on Taxation. The committee said in its report that "it was clear that the mandatory audit program was not a priority" for the IRS and the IRS did not audit Trump in the first two years he was in office. The former president's individual income tax returns filed in 2018, 2019 and 2020 were not selected for examination until after he left office and only the 2016 tax return was subject to a mandatory examination.
Neal said after the vote that it would take a "few days" to release the returns to the public since there will have to be some redactions to protect sensitive information, such as Social Security numbers, PINs and bank accounts. He said they will begin redacting Tuesday night.
Republican ranking member Rep. Kevin Brady of Texas said that the release will likely include six years of Trump's tax returns, along with the tax returns of eight affiliated businesses and audit notes.
Brady said that the IRS audits were not complete. "So any characterizations of the returns themselves … you have to acknowledge this is incomplete at this time," he added.
Brady called the upcoming release "a dangerous new political weapon that overturns decades of privacy protections for average taxpayers in the era of political targeting."
Following the vote, Neal said, "This is about a presidency, not a president." Democrats on the committee said after the vote that nine of the last 10 presidents have released their tax returns, with Trump being the one who refused.
"The idea that somebody is making millions of dollars and can get away without paying their taxes by avoiding — in an unprecedented way — their tax liability, while single moms who are trying to take care of their kids are being audited, is absolutely unacceptable," said Democratic Rep. Mike Thompson of California.
After a years-long legal battle, the Supreme Court cleared the way last month for the Treasury Department to send the returns to Congress. The committee received six years of tax returns for Trump and some of his businesses. Democrats are under pressure to act quickly, since only two weeks remain until Republicans take control of the House of Representatives.
During his 2016 presidential campaign, Trump portrayed himself as a smart businessman who paid nothing in federal taxes, but unlike most major presidential candidates, he refused to release his tax forms to the public.
The only glimpse of his taxes came from reporting by The New York Times in 2018 articles and 2020, which found, according to leaked tax records, that Trump had received the modern equivalent of at least $413 million from his father's real estate holdings. The 2020 New York Times articles reported that Trump paid just $750 in federal income taxes in 2017 and 2018. Trump paid no federal income taxes at all in 10 of the past 15 years because he generally lost more money than he made.
Ellis Kim contributed to this report.
Trump's loans to his children, Ivanka, Donald Trump Jr. and Eric Trump
The Joint Committee on Taxation (JCT), which examined Trump's tax returns on behalf of the Ways and Means Committee, suggested several areas in his returns that merit further investigation, among them, interest income from loans made to three of his children, Ivanka Trump, Donald Trump Jr. and Eric Trump.
The interest income, about $51,000, prompted questions from the JCT about whether the loans were "bona fide" or whether they were "disguised gifts" designed to both avoid gift taxes and enable Trump's children to claim interest deductions from the loans.
Forensic accountant Bruce Dubinsky said he sees no "smoking gun" in the summaries of Trump's returns that have so far been released. His initial assessment of the interest income, for instance, is that it's not uncommon for wealthy Americans to make loans to their children, and it's legal. Dubinsky said that under IRS regulations, the interest rate required is "usually very favorable" compared to a commercial loan.
Each year, he added, the parent can then "forgive a portion of the loan as a non-taxable gift." In 2022, that amount, which would not be subject to gift or income taxes, was $16,000.
"My hunch is that upon audit, these loans would be found to be structured and operated in accordance with the Internal Revenue Code and Treasury regulations," Dubinsky said.
The IRS requires "mandatory examination" of president's, vice presidents returns. While Trump was president, none were completed.
The committee's aim in asking for Trump's taxes was to look into how the IRS enforces tax laws against the president and ensures compliance. The IRS has an internal policy for the mandatory examination of the tax returns for the president and vice president each year. But according to the committee, that policy was not observed during the Trump presidency.
Trump's individual tax returns for the tax years 2015 through 2019 were filed with the IRS, but only one was subject to a mandatory examination, according to the committee report. It shows that former president's individual income tax returns filed in 2018, 2019, and 2020 were not selected for examination until after he left office and only the 2016 tax return was subject to a mandatory examination. And even that audit was not completed while Trump was president.
The committee said in its report that under the prior administration, "it was clear that the mandatory audit program was not a priority and was not provided with the resources needed to ensure compliance by the former President," and it called the program "dormant" under Trump.
Trump spokesman responds to release of tax returns
The former president's spokesman, Steven Cheung, said in a statement, "This unprecedented leak by lameduck Democrats is proof they are playing a political game they are losing."
He added, "If this injustice can happen to President Trump, it can happen to all Americans without cause."